MRO Magazine

Chase Corporation Announces Fiscal 2015 Results


October 28, 2015
By Business Wire News

BRIDGEWATER, Mass.

Chase Corporation(NYSE MKT: CCF) today reported revenue of $64.91 million for the quarter ended August 31, 2015. This is an increase of $3.88 million or 6.4% compared to $61.03 million in the same quarter of last fiscal year. Net income attributable to Chase Corporation of $7.87 million in the current quarter increased $0.85 million or 12.2% from $7.01 million in the prior year period. Earnings per diluted share of $0.84 in the fourth quarter of fiscal 2015 represented an increase of $0.09 compared to $0.75 per diluted share in fiscal 2014. Adjusted EBITDA in the current quarter increased $2.3 million, or 16.8%, to $16.0 million, compared to $13.7 million in the fourth quarter of last year.

For the fiscal year ended August 31, 2015, revenue increased $14.0 million or 6.3% to $238.0 million, compared to $224.0 million in the prior year. Net income attributable to Chase Corporation decreased $0.6 million or 2.4% to $26.0 million or $2.79 per diluted share in the current fiscal year from $26.6 million or $2.86 per diluted share in fiscal 2014. Included in the fiscal 2014 results was a gain, net of tax, totaling $3.71 million or $0.40 per share, related to the sale of the Company’s Insulfab product line in October 2013. Adjusted EBITDA for the current year increased $8.7 million, or 18.6%, to $55.6 million compared to $46.9 million for fiscal 2014.

The Company also announced a cash dividend of $0.65 per share to shareholders of record on November 9, 2015 and payable on December 4, 2015.

Adam P. Chase, President and Chief Executive Officer, commented, “We had a positive finish to our fiscal year driven primarily by the Construction Materials segment’s year-over-year performance. It was nice to see a fourth quarter recovery in seasonal demand for both domestic pipeline maintenance coatings and bridge and highway waterproofing products after a slow start. This provided a further boost to the strong Middle East project related demand experienced during the year.

“The Industrial Materials segment had mixed results. Lower commodity prices are reducing overall demand for wire and cable materials with oil & gas and mining-related end-use applications most affected. This was offset by consistent growth performance during the fiscal year from both electronic & industrial coatings and pulling & detection products. The specialty chemical intermediates acquisition provided a solid contribution to results in the second half of the year, continuing the progress with our M&A program.

“The organization continues to be focused on cost rationalization to improve operating income as demonstrated in this year’s performance. Challenging macroeconomic conditions require continued emphasis on short and long-term cost reductions.

“We are pleased to increase the regular dividend 30% this year to $0.65 per share from $0.50 per share last fiscal year. Last year’s $0.60 per share dividend included a $0.10 per share additional distribution for the sale of a non-strategic business on top of the $0.50 per share regular dividend on operating results.”

The following table summarizes the Company’s financial results for the three months and the years ended August 31, 2015 and 2014.

         For the Three Months Ended    For the Years Ended

August 31,

August 31,

All figures in thousands, except per share figures

2015

   

2014

2015

   

2014

 
Revenue $ 64,911   $ 61,033   $ 238,046   $ 224,006  
 
Costs and Expenses
Costs of products and services sold (1) 40,344 38,745 150,559 146,290
Selling, general and administrative expenses (1) 11,754 11,704 44,658 41,543
Acquisition related costs (1)           584      
 
Operating income 12,813 10,584 42,245 36,173
 
Gain on sale of product line 5,706
Other income (expense), net   (475 )   (283 )   (1,019 )   (1,389 )
 
Income before income taxes 12,338 10,301 41,226 40,490
 
Income taxes   4,472     3,401     15,128     13,967  
 
Net income $ 7,866 $ 6,900 $ 26,098 $ 26,523
 
Net (income) loss attributable to non-controlling interest       112     (95 )   108  
 
Net income attributable to Chase Corporation $ 7,866   $ 7,012   $ 26,003   $ 26,631  
 
Net income per diluted share $ 0.84   $ 0.75   $ 2.79   $ 2.86  
 
Weighted average diluted shares outstanding   9,274     9,175     9,254     9,165  
 
Reconciliation of net income to EBITDA and adjusted EBITDA
Net income attributable to Chase Corporation $ 7,866 $ 7,012 $ 26,003 $ 26,631
Interest expense 253 277 1,063 1,143
Income taxes 4,472 3,401 15,128 13,967
Depreciation expense 1,572 1,413 5,810 5,692
Amortization expense   1,822     1,239     6,762     4,822  
EBITDA $ 15,985 $ 13,342 $ 54,766 $ 52,255
 
Acquisition related costs 584
Gain on sale of product line (5,706 )
Cost of sale of inventory step-up 65
Pension settlement costs   11     348     188     348  
 
Adjusted EBITDA $ 15,996   $ 13,690   $ 55,603   $ 46,897  
 
 
(1) Reflective of expense reclassifications made.

As of August 31, 2015, the Company’s net working capital was approximately $80 million, including cash on hand of $43.8 million. The outstanding balance of the Company’s term debt was $51.8 million at fiscal year-end, and the Company’s $15 million line of credit is currently fully available.

Chase Corporation, founded in 1946, is a leading manufacturer of protective materials for high reliability applications throughout the world.

The Company has used non-GAAP financial measures in this press release. EBITDA and Adjusted EBITDA are non-GAAP financial measures. The Company believes that EBITDA and Adjusted EBITDA are useful performance measures as they are used by its executive management team and board of directors to measure operating performance, to allocate resources to enhance the financial performance of its business, to evaluate the effectiveness of its business strategies and to communicate with its board of directors and investors concerning its financial performance. Non-GAAP financial measures should be considered in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.

Certain statements in this press release are forward-looking. These may be identified by the use of forward-looking words or phrases such as “believe”; “expect”; “anticipate”; “should”; “planned”; “estimated” and “potential” among others. These forward-looking statements are based on Chase Corporation’s current expectations. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that a variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of the Company’s business include, but are not limited to, the following: uncertainties relating to economic conditions; uncertainties relating to customer plans and commitments; the pricing and availability of equipment, materials and inventories; technological developments; performance issues with suppliers and subcontractors; economic growth; delays in testing of new products; the Company’s ability to successfully integrate acquired operations; the effectiveness of cost-reduction plans; rapid technology changes and the highly competitive environment in which the Company operates. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Chase Corporation
Paula Myers, 508-819-4219
Shareholder & Investor Relations Department
investorrelations@chasecorp.com
www.chasecorp.com